Quicklinks:Front Page

Can't sell in a slow market? Consider swapping!

By Carolyn Ezelle, Sarah Ross and Lavinia Strong

Has your property been on the market for months without any offers? Have you repeatedly lowered your asking price? Have you made futile home improvements? As Realtors, we know that in this current market, the answer most sellers have is an exhausting YES! The real frustrating part is that there is a good chance someone else would like to buy your property; however, they are experiencing the same frustrations. There is a way to break this cycle - by swapping houses! At Celia Dunn Sothebys is one local company that will work to find property owners who are willing to swap. There are also local websites such as swaptosell.com that facilitate this process.

How do swaps work?Home and Property swapping helps bring buyers and sellers together. In today's real estate market many people are trying to sell their home but are having trouble finding buyers. In home swapping, two people who are both trying to sell their homes decide to buy each other's home. The transaction is closed as a standard real estate transaction.Simply put, I'll buy your house but only if you buy mine. It can also be viewed as two separate transactions taking place at the same time where party A buys a house from party B, while party B buys the house from Party A. The exchange takes place on the same day. Both parties pay off any existing loans and obtain new financing on the home they are purchasing.Example: The Smiths who live in the suburbs would like to move downtown to be closer to restaurants and shops. The Smiths home is valued at $550,000. They have their eye on the Thomases home downtown that is listed for sale for $950,000. The Thomases would like to downsize. Both families contact their realtors and the realtors negotiate the details so the Smiths move downtown and have a larger mortgage while the Thomases receive $400,000 back from the equity they had in their downtown home and are able to purchase the Smiths’ suburban home.

Who can swap?Anyone who owns a home or property. Trading homes is just another way of selling real estate. Exchanging properties is an alternative way for investors and second home owners to move assets to different locations resulting in reduced risk and depending on your loan, reduced monthly payments.

Benefits?• You can move without having two mortgages and without having to rent or be a landlord. It is easier to obtain financing since your home is under contract. • Also, it preserves the value in your home, as well as your old and new neighborhoods.• You won’t upset your neighbors by drastically reducing the price of your home in order to sell it.• Swapping properties increases seller's chances of receiving close to their asking price.• In today's distressed real estate market, sellers are often forced to accept less than their home is worth because they are competing with short sales and foreclosures and swapping prevents these unnecessary misfortunes.• Avoid the maintenance and upkeep of two homes.• Eliminates the expense of property taxes, insurance, and utility bills on both homes.• Most moving companies give a discount if the same company is used by both parties.

What about closing?The best way to make sure that both properties close is to include a contingency in the purchase and sale agreement for a dual closing of both properties on the same day. Hiring the same real estate attorney and using a Realtor will help ensure a smooth transaction.Can I qualify for a new home while I still own my current home?Yes! It is much easier to obtain financing on a new home when your current home is under contract.Have your realtor contact other realtors who have houses listed that the meet the criteria you are searching for in a new home. Your realtor will most probably be able to find someone who is willing to swap homes with you.

The authors of this article work for Celia Dunn Sotheby's International Realty.